Much anticipated Skilling Australians Fund passed (what employers need to know) - 12 May 2018

Dear Clients and Readers,
What is the Skilling Australians Fund (SAF)?
How will employers be impacted?
What about refunds?
Tips to prepare for the SAF
About Abacus Visa

Dear Clients and Readers,

The Australian Senate finally passed the highly anticipated Skilling Australians Fund legislation on 8 May 2018. (You can read the legislation in full here and here). However, the relevant Migration Regulations have not yet been released, meaning current Training Benchmark regulations still remain in force. We will update our clients and readers as soon as the new regulations have been released.

Given the prolonged delay, the government will be working quickly to pass the regulations as soon as possible, so employers should be prepared to fork out for levy payments at any moment. In this Visa Newsletter, we outline what the Skilling Australians Fund (SAF) is and its impact on employers, as well as provide tips on how employers can best prepare for it.

Kind regards,

Linda McCreath
Principal Lawyer & Managing Director
Abacus Visa Immigration Lawyers
MARN: 0104387

What is the Skilling Australians Fund?

The SAF was set up by the Australian Government to support an additional 300,000 apprenticeships and traineeships in targeted industries and locations across Australia. It will be funded by mandatory contributions from employers.

An estimated $1.5 billion will be available from the Commonwealth for the SAF from 2017-18 to 2020-21.

How will employers be impacted?

Rather than meeting the old Training Benchmarks, employers sponsoring a foreign worker on certain visas will be required to pay the SAF ‘Training Contribution Charge’ (known as a levy) at the time of lodgement of each Nomination. These visas include:

The levy will be collected as part of the nomination application process.

Businesses with turnover of less than $10 million per year will be required to make:

Businesses with turnover of $10 million or more per year will be required to make:

In addition, the SAF legislation allows the Minister to set certain labour market testing (LMT) requirements. Currently, for a nomination to be approved, the Department of Home Affairs (DHA) must be satisfied that a suitable qualified and experienced Australian worker is not available to fill the nominated position. Actions employers must take to satisfy this requirement include:

More details about LMT requirements can be found on the DHA’s website.

What about refunds?

Employers are likely to receive refunds of the levy if:

• The employer’s sponsorship application is refused;
• The employer’s sponsorship application is approved, but the employee’s subsequent visa application is refused on health or character grounds;
• The sponsorship and visa applications are approved but the visa holder does not commence work with the employer; or
• A Temporary Skill Shortage (subclass 482) visa holder leaves their employer within the first 12 months of employment, where the visa period was for more than 12 months. Employers will only receive refunds in this situation for unused full years of the levy.

Tips to prepare for the SAF

• Employers should note that the SAF replaces the obligation to meet Training Benchmarks. If you are sponsoring a worker on a TSS, ENS or RSMS visa, you must pay the nomination training contribution levy (SAF). There are prohibitions against recovering sponsorship-related costs from employee applicants for TSS and other non-SBS nominations ie. employers cannot ask sponsored workers to cover levy costs.
• Businesses and employers will need to plan for the additional costs that levy contributions will impose on the hiring process. In particular, employers sponsoring skilled workers on a TSS visa should consider the number of years they wish to provide sponsorship. For instance, while a certain occupation may be eligible for a four-year visa, an employer with a turnover of less than $10 million per year will need to pay upfront a total of $7,200 ($1,800 for four years) per employee on a TSS visa.
• Likewise, employers sponsoring foreign workers on the TSS visa should take into account the time and cost involved with meeting mandatory LMT requirements.
• Businesses should be prepared to provide accurate records of levy payments (possibly through documents such as annual tax returns or Business Activity Statements). Details around annual turnover, the number of TSS/ENS/RSMS visa holders and any employee terminations will also be helpful to calculate the required contribution amounts and prove compliance with sponsorship obligations.

Further information on the Fund is available at the Department of Education and Training website.

About Abacus Visa

We make it our business at Abacus Visa to give timely and accurate advice tailored to your specific situation. Given the rapid rate at which complex immigration laws can change, our dedicated team of legal immigration professionals is committed to walking you through your visa experience to ensure it is as hassle-free as possible.

For more information on how Abacus Visa can assist with your immigration needs, please get in touch with us today.

Sources: Department of Education and Training, Federal Register of Legislation